A few years ago, Ukraine was not only included in the list of the largest exporters of weapons and military equipment, but also did not occupy the lowest places in it. Later, however, the situation began to change. Due to the negative influence of a number of objective factors, the military exports of Ukrainian enterprises began to gradually decline, as a result of which the country worsened its position in the market. Meanwhile, the military and political leadership is constantly talking about the desire to purchase or receive free military products of foreign production.
Thus, in recent years, a characteristic trend has emerged that has a negative impact on military exports. Ukrainian industry is still capable of at least partially covering the needs of its own army. At the same time, there is the possibility of fulfilling some export contracts. However, the potential of the industry is decreasing, as a result of which the importance of imports is growing. Such tendencies can lead to the most dire consequences.
Past successes
Not so long ago, Ukraine could be considered one of the largest exporters of weapons and equipment in the world. As a legacy from the USSR, she inherited a large number of various enterprises of the defense industry. In addition, she had a solid stock of items remaining in storage. Having no need for such a material part, Ukraine removed it from storage, restored and modernized it, and then sold it to third countries. There was also the production of new types of products, but its volumes were more modest.
MBT "Oplot" is one of the Ukrainian armored vehicles offered for export. Photo Wikimedia Commons
According to the Stockholm Peace Research Institute (SIPRI), Ukraine achieved the greatest success in arms sales in 2012. Then sales secured the 4th place in the list of the largest exporters - the country sold military products with a total value of almost $ 1.49 billion. The next year, 2013, Ukrainian enterprises earned $ 655 million in exports, as a result of which the country dropped to 9th place.
In the first year after the notorious "revolution of dignity" and the start of the "anti-terrorist operation", Ukraine was able to maintain its previous indicators. In 2014, exports amounted to $ 651 million and ensured the preservation of 9th place. In 2015, it fell to $ 400 million (12th place), and in the next 2016, it rose to $ 535 million (10th place). Last year, the cost of supplies fell to a "record" 240 million, with the result that Ukraine fell to 13th place. SIPRI has not yet published data for the current year, but, according to various sources, the situation is unlikely to change for the better.
Until 2014, Ukraine was not always included in the rating of the largest buyers of weapons on the international market from SIPRI. Actually, in 2014, it was included in this list, taking 116th place with purchases at the level of $ 1 million. The next year, they spent 18 million on imported products and climbed to 77th place. In 2016, Ukraine was ranked 137th in the ranking with insignificant spending. Finally, in the list of importers for 2017, Ukraine was placed in the “other” group, without being awarded its own line. At the same time, as far as is known, in recent years the Ukrainian army has been actively purchasing foreign military products.
Open data show that Ukraine is gradually deteriorating its position as an exporter of equipment and weapons, and its position as a buyer is constantly changing. At the same time, the situation is extremely unstable, as a result of which from year to year the indicators change significantly in one direction or the other. How the situation will develop in the foreseeable future is not yet fully clear. However, the experience of recent years clearly shows that worthy grounds for optimism have simply disappeared.
Recent purchases
In June, the UN Register of Conventional Arms released data from Ukraine's 2017 report. According to this report, last year the Ukrainian army received significant quantities of various weapons of various classes from foreign suppliers. They also sold their products to foreign customers. It is curious that the Ukrainian report did not include some data directly related to Ukraine. So, one of the international agreements provided for the sequential transfer of military equipment by several countries to each other, after which it was supposed to get to Ukraine.
Armored vehicles BMP-1AK during modernization. Photo of Ukroboronprom Group of Companies / ukroboronprom.com.ua
According to the Register, in 2017 Ukraine received 2,419 pistols and revolvers from Slovakia. Also, three dozen similar products came from the United States. The United States supplied 30 rifle and carbine items. 460 submachine guns and 3 machine guns were delivered from Turkey to Ukraine. The United States has supplied 503 grenade launchers of various classes. It is likely that these are not all product transfers in the past year.
Interesting data was contained in reports from other countries. So, Slovakia indicated the import of 25 infantry fighting vehicles from the Czech Republic for repair and return to their owners. According to various estimates, in the future, this technique was to come at the disposal of one of the Polish companies. The latter has a contract with Ukraine for the transfer of 200 used BMP-1s. The first batch of this technique was handed over to the Ukrainian side in 2018. Probably, this delivery will be reflected in a new report for the Register of Conventional Arms.
The Ukrainian industry is capable of independently developing and producing anti-tank missile systems, but special hopes in this area in recent years have been associated with imported products. A few years ago, the American-made Javelin ATGM turned from a modern effective missile system into the main dream and the last hope of the Ukrainian army. Finally, this year the dream has come true. In the spring, Washington approved the delivery of 37 launchers and 210 missiles to the Ukrainian army. The first batch of these weapons arrived in Ukraine by early summer.
Future contracts
Together with Crimea, the Ukrainian armed forces lost a significant part of the combat units and auxiliary vessels of the naval forces. This problem is still being solved by building new boats for various purposes, and this process is hindered to a certain extent by the limited capabilities of Ukrainian shipyards. As a result, Kiev has to seek help abroad.
In mid-September it became known that Ukraine could purchase Danish patrol boats of the Flyvefisken / Standard Flex 300 type. According to foreign media reports, an agreement has already been reached on the purchase of three such boats with a total value of more than 100 million euros. These vessels served until the beginning of this decade and then were decommissioned due to obsolescence and incomplete compliance with the operator's requirements. Some of the decommissioned boats were sold to medium-sized and poor countries.
The PSRL-1 grenade launcher is an American copy of the old RPG-7. Photo Airtronic-usa.com
According to some recent reports, Ukraine will acquire ships in the configuration of minesweepers. Flyvefisken boats have a modular architecture and can be equipped with equipment kits for various purposes. In practice, about half of the boats received minesweeper equipment and used only it. The Ukrainian fleet is said to acquire three units in this configuration. There is no information on the purchase of modules for other purposes, which allows us to make some assumptions.
In mid-October, news appeared in the Ukrainian press about the possible acquisition of several more foreign ships. It was argued that the United States offered Ukraine military-technical assistance in the form of two Oliver Hazard Perry-class frigates. In this case, the United States will be able to get rid of the old and decommissioned ships, and Ukraine will be able to replenish its naval forces.
Any details of a possible deal involving the transfer of frigates have not yet been specified. According to early reports, the United States has just come up with a proposal, which means that the countries have not yet started negotiations and have not determined the exact terms of cooperation. Perhaps new information about the transfer of frigates will appear in the near future.
Causes and prerequisites
In recent years, the situation has not been the most optimistic. Ukraine is gradually losing its position as an exporter of arms and is increasingly resorting to imports. It can be seen that this situation had a number of different premises, both comparatively old and newer. The economic policy of recent years, the lack of industrial development, hostilities in the Donbas and general management problems are to blame for the formation of current trends.
It should be recalled that the basis of Ukrainian military exports, both in the past and now, was repaired and modernized equipment removed from storage. Ukraine at one time got large stocks of various Soviet-made combat vehicles, and their sale gave a good income. However, the number of armored vehicles suitable for repair is not infinite. In addition, after the start of the "anti-terrorist operation" it was necessary to make up for the losses of our own army. All of this was compounded by a chronic lack of funding. As a result, the commercial potential for the export modernization of old cars has been sharply reduced.
One of the Danish Flyvefisken boats sold abroad. Photo by the Ministry of Defense of Lithuania
In this context, of particular interest is the scheme for the sale of used BMP-1, in which, in addition to Ukraine, Slovakia, the Czech Republic and Poland are involved. The infantry fighting vehicle of the first model cannot be called a rare vehicle, and there were many such samples at Ukrainian storage bases. However, the amount of such equipment, which can still be restored and returned to service, seems to have been reduced to alarming values. As a result, the Ukrainian army has to look for foreign suppliers. Apparently, a similar situation takes place not only in the case of infantry fighting vehicles. There may be problems with tanks, self-propelled artillery, etc.
It is also worth remembering the agreements on the supply of grenade launchers. Ukraine sold 790 hand-held anti-tank grenade launchers to the United States in 2017, according to the Register of Conventional Arms. In the same period, 503 grenade launchers were delivered from the United States. Apparently, a foreign country was supplied with popular and massive products of the RPG-7, and the PRSL-1 grenade launchers went back. The latter are a slightly modernized version of the RPG-7.
It turns out that Ukraine has exhausted the usable stock of some products, while others are still available in sufficient quantities. At the same time, the available weapons go not to the army, but for export, followed by the purchase of foreign products that differ little from those sold. It is not at all difficult to understand why such agreements appear. Selling the necessary weapons abroad allows you to make good money. With the right approach, extra money can be obtained when purchasing foreign products.
Thus, there is a certain corruption component in the export and import of weapons and equipment, which also leads to an increase in estimates and aggravation of the financial problems of the army. An example of this can be the estimates for the project for the purchase and modernization of imported BMP-1. According to the Ukrainian press, $ 5 million will be spent on the purchase of 200 armored vehicles from the Czech Republic. The Polish company responsible for dismantling equipment and minor repairs will receive almost $ 20 million for the delivery of 200 chassis and over $ 13 million for a set of turrets. The final assembly and repair will be carried out by the Zhytomyr Armored Plant for $ 8 million.
It is reported that each modernized BMP-1 will cost the army $ 205,000. However, it should be taken into account that the Czech Republic was selling equipment at $ 25,000 per unit, and the modernization actually consists in replacing non-working units and installing new communication devices. As a result, the army receives slightly converted BMP-1 at inflated prices. The organization of dubious schemes leading to higher prices for products has clear results. Individuals and entire organizations get the opportunity to make good money not only on the sale of equipment, but also on its purchase.
The frigate USS Boone (FFG-28) of the Oliver Hazard Perry class. Photo by US Navy
Another reason for the transition to imports is the discrepancy between the production potential and the expectations and desires of the military and political leadership. During the Soviet era, Ukrainian enterprises, working within the framework of cooperation, could build large warships of the main classes, as well as carry out their repair. However, in the future, cooperation was destroyed, and the lack of orders led to the degradation of production.
As a result of these processes, Ukrainian shipbuilders can design and build only boats for various purposes and small ships. Large surface ships or submarines are beyond their capabilities. In this case, obtaining obsolete American frigates turns out to be almost the only available way to replenish the surface fleet with something other than boats. The desire to purchase Danish minesweeping boats also does not give rise to optimistic assessments of the prospects for Ukrainian shipbuilding, including its export potential.
Doubtful prospects
The lack of a competent economic policy, the inability to manage the available opportunities, the loss of military vehicles during the civil war, the illogical management of the main industries, as well as the desire of high-ranking officials to cash in on certain contracts gradually led to negative consequences. Until recently, Ukraine provided its own needs and was a major exporter of military products, even if it was due to the sale of updated products of the old production. Now the situation is changing, and the country has to rely more and more on imports.
Now Ukraine does not have all the necessary opportunities for the development of its defense industry and a new full-scale entry into the international market. Moreover, its current leadership does not seem to have such a desire. Responsible persons are not interested in the long-term development of the most important sector, and are guided by other ways of earning money. This approach is not conducive to achieving outstanding results or maintaining the desired state of affairs, but, probably, it suits the military and political leadership of the country.
One of the outcomes of this approach in the context of the defense industry is a decline in exports and an increase in dependence on foreign supplies. Most likely, the situation will develop in a negative way and complicate the situation in the industry. In a few months, analysts will begin to take stock of 2018, and their reports on Ukraine and its defense industry are unlikely to be overly optimistic.
